Does Brain Balance have to provide a notice of termination immediately upon a Non-Curable Default?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.01. COMPANY shall have the absolute right, at its option, to terminate this Agreement and all rights granted hereunder, upon any of the following Non-Curable Defaults by FRANCHISEE, without giving an opportunity to cure the default and without prejudice to any other rights or remedies of COMPANY provided by law or this Agreement, effective immediately upon the provision of notice to FRANCHISEE or at such later time as indicated in such notice if:
- (a) FRANCHISEE fails to complete the initial Training Program prior to opening of the Center;
- (b) FRANCHISEE or any of its members, shareholders, officers, or FRANCHISEE's spouse use or disclose any of the Operations Manual, trade secrets, or confidential information in violation of this Agreement or any ancillary agreement signed in connection with this Agreement;
- (c) FRANCHISEE files a petition in bankruptcy or a petition in bankruptcy is filed against FRANCHISEE, which is not vacated after prompt and diligent effort to do so, or if FRANCHISEE files a petition for any relief under the United States Bankruptcy Act, or any state statute for protection against creditors, or FRANCHISEE becomes bankrupt or insolvent, or makes an assignment for the benefit of its creditors, or FRANCHISEE discontinues the Franchised Business, or a receiver is appointed over the operation of the Franchised Business and is not removed after prompt and diligent efforts to do so;
- (d) FRANCHISEE maintains false books, records, or financial or operating statements;
- (e) FRANCHISEE or any officer, director, partner, member, or principal shareholder of FRANCHISEE is convicted of a felony or the conversion or embezzlement of any property or funds, whether belonging to COMPANY or any other party, or a crime involving moral turpitude;
- (f) FRANCHISEE receives from COMPANY three (3) or more notices to cure defaults or violations of this Agreement within a twelve (12) month period;
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, Brain Balance has the option to terminate the agreement immediately upon a Non-Curable Default by providing notice to the franchisee. The notice is effective immediately upon delivery, or at a later time specified in the notice, without providing an opportunity to cure the default. This termination is without prejudice to any other rights or remedies Brain Balance may have under law or the agreement.
Non-Curable Defaults that allow Brain Balance to terminate the agreement immediately include situations such as the franchisee failing to complete the initial training program before opening the center, or the franchisee or their affiliates disclosing the Operations Manual, trade secrets, or confidential information. Additional non-curable defaults include the franchisee filing for bankruptcy, maintaining false records, or being convicted of a felony.
This immediate termination clause is significant for prospective franchisees because it means that certain breaches of the agreement can lead to immediate loss of the franchise without any chance to correct the issue. It is important for franchisees to understand what constitutes a Non-Curable Default and to ensure strict compliance with the franchise agreement to avoid such a situation. The franchisee should be aware that Brain Balance's decision to terminate is at their discretion, and they are not obligated to provide any cure period for these types of defaults.